MixologyThe Mixology of Increased Revenue

Known as one of the most complicated cocktails in the world, the Rum Martinez takes 23-year-old rum, toasted wood chips, a smoke infuser, vermouth, maraschino, and bitters. While not heavy on ingredients, it is heavy on process. The Commonwealth, on the other hand, revolves around ingredients, an astounding 71 of them. From sourcing the ingredients to creating the finished product, it is no small feat to make either of these drinks. This is exactly what hospitality marketers are doing every day – executing a complicated process with an overwhelming array of elements, including channels, rates, occupancy, diverse media, and more. Complexity does not necessarily make a profit, though. In fact, sometimes it actually eats them. So the question is how can hotels, vacation rentals, and timeshares tailor this substantial effort so that it will actually increase revenue? The ideal mix simplifies the process and isolates only the essential ingredients by automating, integrating, and tracking. The successful revenue cocktail applies this to key areas: product, price, placement, promotion, people, and process. The first four are widely known as the four P’s of marketing; the latter two reflect the digital nature of modern vacation rental marketing.

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Clarity around the product is essential. Consider the location, level of service, size, and amenities as you craft a strategy. In today’s travel industry, it is far too easy to blast all of your inventories to one or two of the seemingly most productive channels, but giving thought to the best fit for different inventory types will increase revenue.

Price

Price means more than determining a seasonal rack rate. Automating revenue and yield management in a way that tracks competition and occupancy is essential to maintaining an edge over the competition. Part and parcel to setting revenue-generating prices is a true understanding of your competition. Vacation rentals, timeshares, and hotels are competing against and among one another. In today’s travel industry, competition isn’t just the nearest hotel in your category. Two competitors may offer similar features and/or rates but may be miles from one another.

Placement

Where are you selling your inventory? This is among the most “Commonwealth” (that is, complicated) aspects of the vacation rental marketing mix. With so many opportunities online and elsewhere, how do lodging marketers identify the most profitable avenues for a property? All-too-often marketers wait too long, sweat in the face of lower-than-anticipated occupancy, compromise rate, and then choose distribution. An early and careful consideration of rate followed by a strategic approach to distribution can ensure the ideal rate for the ideal time.

Placement includes some or all of the following: brand and/or property website, online travel agencies, instant booking sites, GDS, and direct. Placement should also account for operational considerations, such as PMS integration with GDS and third-party channels, resulting in one database for rates and inventory.

People

The consumer emphasis is on “me.” As in, “it’s all about me.” Travelers have become accustomed to being served with what they want, when they want it, as much during the travel buying process as during the experience. Though personalization is one of the most overused and misrepresented words in the industry as of late, it can be the key to increased revenue.

The travel industry is privy to far more identifying information about guests than ever before in history. Simultaneously, the purchase process has grown exponentially more complicated, including hundreds of web pages accessed on several different devices. An intimate knowledge of past guests allows suppliers to craft highly targeted—and more profitable messaging. Meanwhile, a clear understanding of your new guest target markets, in conjunction with technology that lets you easily serve the right message to the right traveler, will increase conversions.

Process

What was once a process that began broadly—at the top of the proverbial buying funnel—and narrowed toward a decision, now looks more akin to a maze of research that ends in the center with a decision. Those of us doing vacation rental marketing are tasked with tapping into guest identity (people) and appealing to them at various points throughout the booking pathway. The more touch points throughout the process, the higher the traveler’s awareness of your product. This requires a desktop strategy, a mobile strategy including tablets and smartphones, careful consideration of the way content and images are presented, and attention to placement on all sites so that mobile travelers with their much more limited screen size will find your property.

Micro-Moments
Image Courtesy Tourism eSchool using Google Statistics

“Process” simultaneously requires having a presence across each of the four online phases above—I want to know, I want to go, I want to do, and I want to buy. Each one is comprised of a multitude of moments in which a traveler will “reflexively turn to a device… to act on a need to learn something, do something, watch something, or buy something”—taking place across search engines, brand websites, and more.[1]

Promotion

Many of us doing vacation rental marketing have a myopic conviction that promotion is the bulk of the job, but promotion can’t happen successfully without the other pieces in place. Promotion can only be effective when the rate is clear, the people have been carefully identified, the product is understood, the channels have been selected, and the process by which the traveler arrives at the promotion has been addressed. Only then can effective promotions be created, whether they are broad online promotions (SEO, PPC, email), third-party promotions (OTAs, meta-search, instant booking, listing sites), social media (blogging, Instagram, Twitter, Facebook), or offline (print and voice).

Conclusion

The traditional approach to hospitality marketing goes something like “we have a need time, let’s create a deal, and then we’ll figure out the ‘who’ and ‘how’ of visibility for the promotion”. The ideal revenue cocktail will, instead, begin with the product, price, and appropriate placement. Following the determination of the travelers to be reached, along with an idea of how those travelers journey through the buying process, effective revenue-generating promotions can be rolled out.

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[1] Ramaswmany, Sridhar. How Micro-Moments are Changing the Rules. Think with Google, April 2015.

 

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